STOCK PURCHASE AGREEMENT
This Agreement dated as of September 30, 1994 is entered into by and among
Sepracor Inc., a Delaware corporation (the "Company"), and OFD Partners, L.P.
(the "Purchaser").
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Sale of Shares and Warrants.
(a) Subject to the terms and conditions of this Agreement, at the
Closing (as defined below), the Company will sell and issue to the Purchaser,
and the Purchaser will purchase, 79,365 shares of Series A Convertible Preferred
Stock of the Company ("Series A Preferred Stock") at a purchase price of $63.00
per share. The shares of Series A Preferred Stock being sold under this
Agreement are referred to as the "Shares," and the shares of Common Stock
issuable upon conversion thereof are referred to as the "Conversion Shares." The
Series A Preferred Stock shall have the rights, preferences and privileges set
forth in the Certificate of Designations attached hereto as Exhibit A, which
shall be filed with the Secretary of State of Delaware prior to the Closing.
(b) Subject to the terms and conditions of this Agreement, at the
Closing, the Company will sell and issue to the Purchaser, and the Purchaser
will purchase, (i) Common Stock Purchase Warrants to purchase 793,650 shares of
Common Stock, at an exercise price of $6.30 per share; (ii) Common Stock
Purchase Warrants to purchase 178,000 shares of Common Stock, at an exercise
price of $7.50 per share; and (iii) Common Stock Purchase Warrants to purchase
22,000 shares of Common Stock, at an exercise price of $12.00 per share. In
consideration for the issuance of the Common Stock Purchase Warrants referred to
in clauses (i), (ii) and (iii) (collectively, the "Warrants"), the Purchaser
shall pay to the Company, at the Closing, an amount equal to $.001 per share of
Common Stock subject to the Warrants issued to the Purchaser hereunder. The
Warrants shall be in the form attached hereto as Exhibit B. The shares of Common
Stock issuable upon exercise of the Warrants are referred to as the "Warrant
Shares."
2. The Closing. The closing ("Closing") of the sale and purchase of the
Shares and Warrants under this Agreement shall take place at the offices of Xxxx
and Xxxx, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at 10:00 a.m. as of September
30, 1994, or at such other time, date and place as are mutually agreeable to the
Company and the Purchaser. At the Closing, the Company shall deliver to the
Purchaser a certificate for 79,365 Shares and the Warrants, in each case
registered in the name of Purchaser, against payment to the Company of the
purchase price therefor, by wire transfer,
check, or other method acceptable to the Company. The date of the Closing is
hereinafter referred to as the "Closing Date."
3. Representations of the Company. The Company hereby represents and
warrants to the Purchaser as follows:
3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated by this
Agreement. The Company is duly qualified to do business as a foreign corporation
and is in good standing in the Commonwealth of Massachusetts and in every other
jurisdiction in which the failure to so qualify would have a material adverse
effect on the operations or financial condition of the Company.
3.2 Capitalization. The authorized capital stock of the Company consists
of 25,000,000 shares of Common Stock, of which 18,659,909 shares were
outstanding as of June 30, 1994, and 1,000,000 shares of Preferred Stock, $1.00
par value per share, of which no shares are issued or outstanding prior to the
Closing of the transactions contemplated by this Agreement (the "Closing").
Since June 30, 1994 there has not been any material change in the number of
outstanding shares of Common Stock. All of the issued and outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable. Except as disclosed in the SEC Filings (as defined below), the
Company will not have outstanding securities convertible into or exchangeable
for any shares of the Company's capital stock (other than the Shares), nor will
it have outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
any shares of the Company's capital stock or any securities convertible into or
exchangeable for any shares of the Company's capital stock (other than the
Shares). As of the Closing, the Company will not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise, acquire or retire any
shares of its capital stock.
3.3 Issuance of Shares. The issuance, sale and delivery of the Shares,
Conversion Shares, Warrants and Warrant Shares in accordance with this Agreement
have been duly authorized by all necessary corporate action on the part of the
Company, and all the Shares, Warrant Shares and Conversion Shares have been duly
reserved for issuance. The Shares, Conversion Shares and Warrant Shares, when
issued and delivered against payment therefor in accordance with the provisions
of this Agreement and the Warrants, respectively, will be duly and validly
issued, fully paid and non-assessable.
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3.4 Company Reports and Financial Statements. The Company has delivered
to the Purchaser true and complete copies of all reports, registration
statements (other than registration statements on Form S-8), proxy statements
and other definitive filings filed by the Company with the Securities and
Exchange Commission since January 1, 1993 (such reports, registration
statements, proxy statements and other definitive filings, as amended, are
sometimes collectively referred to as the "SEC Filings"). The SEC Filings comply
in all material respects with the Securities Act of 1933, as amended (the
"Securities Act") and the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and did not as of the dates thereof contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements contained therein not misleading. The audited
financial statements included in the SEC Filings were prepared in accordance
with generally accepted accounting principles applied on a consistent basis and
fairly present the financial position of the Company as at the dates thereof and
the results of operations and cash flow for the periods then ended.
3.5 Authority for Agreement. The execution, delivery and performance by
the Company of this Agreement and the Warrants and the consummation by the
Company of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action. This Agreement and the Warrants
have been duly executed and delivered by the Company and constitute valid and
binding obligations of the Company enforceable in accordance with their
respective terms. The execution of and performance of the transactions
contemplated by this Agreement and the Warrants and compliance with the
provisions hereof and thereof by the Company will not violate any provision of
law and will not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or require a consent
or waiver under, its Certificate of Incorporation or By-Laws (each as amended to
date) or any indenture, lease, agreement or other instrument to which the
Company is a party or by which it or any of its properties is bound, or any
decree, judgment, order, statute, rule or regulation applicable to the Company.
3.6 Governmental Consents; Offering. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of the Company
in connection with the execution and delivery of this Agreement or the offer,
issuance, sale and delivery of the Shares and Warrants. Based in part on the
representations made by the Purchaser in Section 4 hereof, the offer and sale of
the Shares and Warrants to the Purchaser will be in compliance with applicable
Federal and state securities laws.
Neither the Company nor anyone acting on behalf of the Company has offered
the Shares or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof
with, any person
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other than the Purchaser. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action which would subject the issuance or sale of
the Shares or the Warrants to Section 5 of the Securities Act of 1933, as
amended.
No broker's or finder's or placement fee or commission will be payable with
respect to the issuance of the Shares, the Warrant Shares or the Warrants, or
any of the transactions contemplated by this Agreement. The Company will hold
the Purchaser harmless from any claim, demand or liability for brokers' or
finders' or placement fees or similar commission alleged to have been incurred
in connection with any such transaction.
3.7 Litigation. Except as disclosed in the SEC Filings, there is no
action, suit or proceeding, or inquiry or investigation, pending, or, to the
best of the Company's knowledge, any basis therefor or threat thereof, against
the Company which might result, either individually or in the aggregate, in any
material adverse change in the business, prospects, assets or condition,
financial or otherwise, of the Company.
3.8 Compliance. The Company has, in all material respects, complied with
all laws, regulations and orders applicable to its present and proposed business
and has all material permits and licenses required thereby.
3.9 Employees. All employees of the Company whose employment
responsibility requires access to confidential or proprietary information of the
Company have executed and delivered nondisclosure and assignment of invention
agreements, and all of such agreements are in full force and effect. None of the
employees of the Company is represented by any labor union, and there is no
labor strike or other labor trouble pending with respect to the Company
(including, without limitation, any organizational drive) or, to the best of the
Company's knowledge, threatened.
3.10 Absence of Changes. Since June 30, 1994, there has been no material
adverse change in the financial condition or results of operations of the
Company, other than changes occurring in the ordinary course of business.
3.11 Disclosure. The representations and warranties of the Company
contained in this Agreement do not contain any untrue statement of material fact
with respect to the subject matter hereof or omit to state any material fact
necessary to make the statements contained herein, in light of the circumstances
under which they were made, not misleading.
4. Representations of the Purchaser. The Purchaser hereby represents and
warrants to the Company as follows:
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4.1 Investment. The Purchaser is acquiring the Shares and Warrants for
its own account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling the same.
4.2 Authority. The Purchaser has full power and authority to enter into
and to perform this Agreement in accordance with its terms.
4.3 Experience. The Purchaser has carefully reviewed the representations
concerning the Company contained in this Agreement, has made detailed inquiry
concerning the Company, its business and its personnel; the officers of the
Company have made available to Purchaser any and all written information which
he or it has requested and have answered to Purchaser's satisfaction all
inquiries made by Purchaser; and Purchaser has sufficient knowledge and
experience in investing in Companies similar to the Company so as to be able to
evaluate the risks and merits of its investment in the Company.
4.4 Legend. The Purchaser understands that the stock certificate
representing the Shares shall bear a legend substantially to the following
effect:
"The shares represented by the certificate have
not been registered under the Securities Act of
1933, as amended, and may not be offered, sold or
otherwise transferred, pledged or hypothecated
unless and until such shares are registered under
such Act or an opinion of counsel satisfactory to
the Company is obtained to the effect that such
registration is not required."
4.5 Accredited Investor. The Purchaser is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities Act.
5. Closing Conditions. The obligation of the Purchaser to purchase and pay
for the Shares and the Warrants to be acquired by it hereunder is subject to the
conditions hereinafter set forth.
5.1 Representations and Warranties True. All representations and
warranties of the Company made in Section 3 or otherwise under or pursuant to
this Agreement shall be true on the Closing Date as though made on the Closing
Date and the Company shall have delivered to the Purchaser a certificate of an
authorized officer dated the Closing Date, certifying to such effect.
5.2 Instruments and Proceedings to be Satisfactory. All instruments and
corporate proceedings relating to the sale of the Shares and the Warrants
hereunder by the Company or otherwise relating to the transactions contemplated
hereby shall be satisfactory to the Purchaser.
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5.3 Opinion of the Company's Counsel. The Purchaser shall have received
from Xxxx and Xxxx, counsel for the Company, an opinion, dated the Closing Date,
in scope and substance satisfactory to such Purchaser, as to the matters
included in Sections 3.1, 3.3 and 3.5 hereof, except that with respect to the
matters included in Section 3.5, such opinion shall relate only to such
indentures, leases, agreements or other instruments filed as exhibits to the
Company's Annual Report on Form 10K for the year ended December 31, 1993 and the
Company's Quarterly Reports on Form 10Q for the quarters ended March 31, 1994
and June 30, 1994.
6. Registration Rights.
6.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation or covering only outstanding
securities to be sold on behalf of stockholders pursuant to the Amended and
Restated Registration Rights Agreement dated as of June 28, 1991 among the
Company and certain stockholders (the "1991 Agreement") and/or the Agreement
dated as of June 1, 1993 between the Company and Xxxxxx Xxxxxxx Dow Inc.).
"Registration Expenses" means the expenses described in Section 6.5.
"Registrable Shares" means (i) the Conversion Shares and Warrant
Shares (ii) any other shares of Common Stock issued in respect of such shares
(because of stock splits, stock dividends, reclassifications, recapitalizations,
or similar events); provided, however, that shares of Common Stock which are
sold pursuant to a Registration Statement or Rule 144 under the Securities Act
shall thereupon cease to be Registrable Shares.
"Stockholders" means the Purchaser and any persons or entities to
whom the rights granted under this Agreement are transferred by the Purchaser,
its successors or assigns pursuant to Section 6.11 hereof.
6.2 Required Registrations.
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(a) At any time after September 30, 1995, a Stockholder or
Stockholders (the "Requesting Stockholder or Stockholders") may request, in
writing, that the Company effect the registration on Form S-3 (or any successor
form) of Registrable Shares owned by such Requesting Stockholder or Stockholders
having an aggregate offering price of at least $3,000,000 (based on the then
current market price). If the Requesting Stockholders intend to distribute the
Registrable Shares by means of an underwriting, they shall so advise the Company
in their request. The managing underwriter(s) shall be selected by the
Requesting Stockholders and shall be subject to the approval of the Company,
which approval shall not be unreasonably withheld. Upon receipt of any such
request, the Company shall promptly give written notice of such proposed
registration to all other Stockholders. Such other Stockholders shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such other Stockholders may request in such notice
of election; provided that if the underwriter(s) (if any) managing the offering
determines that, because of marketing factors, all of the Registrable Shares
requested to be registered by all Stockholders may not be included in the
offering, the Stockholders shall, subject to the 1991 Agreement, participate in
the registration pro rata among themselves based upon the number of Registrable
Shares which they have requested to be so registered. Thereafter, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or any successor form) of all Registrable Shares which
the Company has been requested to so register.
(b) The Company shall not be required to effect more than three
registrations pursuant to paragraph (a) above. In addition, the Company shall
not be required to take any action to effect a registration requested pursuant
to paragraph (a) above within (i) 180 days following the effective date of any
Registration Statement covering shares to be sold for the account of the Company
or (ii) within 90 days following the effective date of any registration
statement filed by the Company with the Commission to register shares demanded
to be registered by stockholders pursuant to the 1991 Agreement.
(c) If at the time of any request to register Registrable Shares
pursuant to this Section 6.2, the Company is engaged or has fixed plans to
engage within 60 days of the time of the request in a registered public offering
or is engaged in any other activity which, in the good faith determination of
the Company's Board of Directors, would be adversely affected by the requested
registration to the material detriment of the Company, then the Company may at
its option direct that such request be delayed for a period not in excess of six
months from the effective date of such offering or the date of commencement of
such other material activity, as the case may be, such right to delay a request
to be exercised by the Company not more than once in any 24-month period.
6.3 Incidental Registration.
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(a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 6.2) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 20 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration proposed to be effected
pursuant to this Section 6.3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 6.3
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it. If in the opinion of the managing underwriter it is
appropriate because of marketing factors to limit the number of shares to he
sold for the account of selling stockholders to be included in the offering,
then there shall first be included any shares of Common Stock entitled, as of
the date hereof, to be registered therein prior to the Registrable Shares
pursuant to the 1991 Agreement (including shares entitled as of the date hereof
to be registered on a parity basis with any such priority rights), to the extent
the 1991 Agreement is then in effect, and holders of Registrable Shares shall be
entitled to include in such registration only such remaining number of shares
that the managing underwriter determined may be included therein. If the number
of Registrable Shares to be included in the registration in accordance with the
foregoing is less than the total number of shares that holders of Registrable
Shares have requested to be included, then the holders of Registrable Shares who
have requested registration and other holders of securities entitled to include
them in such registration on a parity basis with the Registrable Shares shall
participate in the registration pro rata based upon their total ownership of
shares of Common Stock entitled to be so included. If any holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among other requesting holders pro rata in the
manner described in the preceding sentence.
6.4 Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
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(a) file with the Commission a Registration Statement with respect
to such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as practicable prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any other
offering, until the earlier of the sale of all Registrable Shares covered
thereby or the date five years after the Closing Date, provided, that
Stockholders shall, upon written notice from the Company, cease sales of
Registrable Shares pursuant to a Registration Statement filed hereunder for a
period not to exceed 90 days in any 24-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
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6.5 Allocation of Expenses. The Company will pay all Registration
Expenses of all registrations under this Agreement; provided, however, that if a
registration under Section 6.2 is withdrawn at the request of the Requesting
Stockholders (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested) and if the Requesting
Stockholders elect not to have such registration counted as a registration
requested under Section 6.2, the Requesting Stockholders shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares to be included in such registration. For
purposes of this Section 6.5 the term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with this Agreement, including,
without limitation, all registration and filing fees, printing expenses, fees
and expenses of counsel for the Company, state Blue Sky fees and expenses, but
excluding underwriting discounts, selling commissions and the fees and expenses
of any selling Stockholder's own counsel.
6.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement made in such Registration
Statement, preliminary prospectus or final prospectus, or any such amendment or
supplement, or upon any omission therefrom, in reliance upon and in conformity
with information furnished to the Company, in writing, by or on behalf of such
seller, underwriter or controlling person specifically for use in the
preparation thereof.
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(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of such Stockholders
hereunder shall be limited to an amount equal to the proceeds to each
Stockholder of Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section 6.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6.6. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified
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Party shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to a this
Section 6.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6.6 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Stockholder or any such
controlling person in circumstances for which indemnification is provided under
this Section 6.6; then, in each such case, the Company and such Stockholder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportions so that such
holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Shares offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
6.7 Information by Holder. Each Stockholder including Registrable Shares
in any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
6.8 Rule 144 Requirements. The Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to any holder of Registrable Shares upon request (i) a
written statement by the Company as to its compliance with the requirements of
said
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Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
6.9 Termination. All of the Company's obligations to register
Registrable Shares under this Agreement shall terminate on the tenth anniversary
of the Closing Date, provided, however, that the Company shall have no
obligation to register shares hereunder at any time the Registrable Shares may
be sold pursuant to Rule 144(k) under the Securities Act (or its successor).
6.10 Transfers of Rights. The rights and obligations of any Purchaser
under this Section 6, may be assigned by Purchaser to any person or entity which
acquires at least 100,000 Shares, Conversion Shares and/or Warrant Shares
originally acquired by Purchaser from the Company, and such transferee shall be
deemed a "Purchaser" for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company.
6.11 Consent. The Company shall use its reasonable best efforts, as soon
as practicable after the Closing, to obtain the requisite consents of the
parties to the 1991 Agreement to (i) delete the provisions of Section 6.2(b)(ii)
of this Agreement and (ii) amend this Agreement to provide that the incidental
registration rights granted to the Purchaser in Section 6.3 shall be on a parity
and pro rata basis with the incidental registration rights granted pursuant to
Section 3.2(b)(i) of the 1991 Agreement and to provide that no party to the 1991
Agreement shall have any incidental registration rights with respect to any
registration demanded by the Stockholders hereunder. If and when such consents
are obtained, the parties shall amend this Agreement to reflect the foregoing
modifications.
7. Right of Participation. The Company shall, prior to any proposed
issuance by the Company of any shares of Common Stock or other securities
convertible into or exercisable for shares of Common Stock (collectively,
"Securities") in a Dilutive Financing (as defined below), offer to Purchaser by
written notice the right, for a period of thirty (30) days, to purchase for cash
at an amount equal to the price or other consideration for which such Securities
are to be issued in such Dilutive Financing, a number of such Securities so
that, after giving effect to such issuance (and the conversion and exercise into
or for shares of Common Stock of all such securities that are so convertible or
exercisable), Purchaser will continue to maintain its same proportionate
ownership in the Company as of the date of such notice (treating Purchaser, for
the purpose of such computation, as the holder of the number of shares of Common
Stock which would be issuable to Purchaser upon conversion and exercise of all
securities held by Purchaser on the date such offer is made, and assuming the
like conversion and exercise of all such other securities held
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by other persons). For purposes of this Section 7, a "Dilutive Financing" means
any issuance of Securities (i) for which the purchase price, on a common stock
equivalent basis, is less than the then effective Conversion Price of the Series
A Preferred Stock (as defined in the Certificate of Incorporation of the
Company) and (ii) as a result of which, an anti-dilution adjustment is not made
to the Conversion Price of the Series A Preferred Stock by virtue of Section
4(d)(i)(D)(VI) of Article Fourth of the Company's Certificate of Incorporation.
For purposes of this Section 7, "Common Stock" shall be deemed to include equity
security having rights to receive dividends or distributions (including
liquidation) not limited to a fixed sum or percentage of the purchase price
therefor, and the price at which such securities are deemed issued for purposes
hereof shall take into account as appropriate the relationship between the terms
thereof and the terms of the Shares.
The Company's written notice to the Purchaser shall describe the Securities
proposed to be issued by the Company and specify the number, price and payment
terms. Purchaser may accept the Company's offer as to the full number of
Securities offered to it or any lesser number, by written notice thereof given
by it to the Company prior to the expiration of the aforesaid thirty (30) day
period, in which event the Company shall promptly sell and Purchaser shall buy,
upon the terms specified, the number of Securities agreed to be purchased by
Purchaser. The Company shall be free at any time prior to ninety (90) days after
the date of its notice of offer to Purchaser, to offer and sell to any third
party or parties the remainder of such Securities proposed to be issued by the
Company (including but not limited to the Securities not agreed by Purchaser to
be purchased by it), at a price and on payment terms no less favorable to the
Company than those specified in such notice of offer to Purchaser. However, if
such third party sale or sales are not consummated within such ninety (90) day
period, the Company shall not sell such Securities as shall not have been
purchased within such period without again complying with this Section 7.
The obligations of the Company under this Section 7 shall terminate upon
the earlier of (i) the conversion of all outstanding Shares into Common Stock or
(ii) ten years after the Closing Date.
8. General.
(a) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at 00 Xxxxx Xxxxx, Xxxxxxxx, XX 00000, Attention:
President, or at such other address or addresses as may have been furnished in
writing by the Company to the Purchaser, with a copy to Xxxx X. Xxxxxx, Xxxx and
Xxxx, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000; or
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If to Purchaser, at such address or addresses as may have been furnished to
the Company in writing by Purchaser.
Notices provided in accordance with this Section 8 shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
(c) Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least a majority of the
Registrable Shares (giving effect to the Conversion of all Shares and exercise
of all Warrants); provided, that this Agreement may be amended with the consent
of the holders of less than all Registrable Shares only in a manner which
affects all Registrable Shares in the same fashion. No waivers of or exceptions
to any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
(e) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
Executed as of the date first written above.
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COMPANY:
SEPRACOR INC.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Title: President
PURCHASER:
OFD PARTNERS, L.P.
OFD GENERAL, INC. (ITS GENERAL PARTNER)
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
President
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